JETSTAR REACHES ENTERPRISE BARGAINING AGREEMENT
JETSTAR REACHES ENTERPRISE BARGAINING AGREEMENT – WITHOUT UNION SUPPORT
Having had a lot of experience with Industrial Relations (IR), and particularly negotiating with the TWU, I read with some interest the news coming out of the latest foray by the TWU to negotiate better pay and conditions with Jetstar through their latest Enterprise Bargaining Agreement for ground staff.
It was not a resounding success for the TWU – with Jetstar pulling off a majority vote directly with employees and without TWU support, after a year of negotiations. Jetstar will now submit the Enterprise Agreement to the Fair Work Commission for approval.
While we can now expect a battle from the TWU during the Enterprise Agreement’s approval process, if Jetstar have all their ducks in a row with the procedural points of the voting process, then there may well be no points of law, or interpretation around the better-off-overall test (BOOT), that can stop the Agreement being approved.
The
Opposing
Sides
From a wages and conditions perspective, the TWU sought a 4% annual increase in base rates of pay, as well as a minimum of 30 paid hours for members struggling through under-employment – i.e., being employed for too few hours a week.
Jetstar laid a clear strategy of 3% annual increase, mirroring the exact position of Qantas in recent bargaining negotiations, with further agreement around rostering and allowances. Jetstar’s CEO, Gareth Evans, has said that the Union was out-of-step with the realities of operating a business with their proposal, which included a 12% increase in costs for the first year alone.
Enterprise Bargaining - Strategy
As part of the Qantas Group, it should come as little surprise that having a strong, some might say aggressive, IR strategy was inevitable by Jetstar.
Qantas made an unprecedented decision to ground their fleet in 2011, under Alan Joyce’s tenure as CEO, in response to what Qantas deemed as untenable pressure and demands from Unions at a time when post-GFC, Qantas was financially suffering on all fronts, with a somewhat bleak future. This led the federal government to intervene in the dispute, with the Fair Work Commission handing down orders to both sides to cease industrial action immediately on the basis that it would do significant damage to the national economy. That’s a story for another day.
The Qantas Group, in recent years, has been very vocal that it will not agree to any more than 3% wage increases with the uncertainties facing airlines and tourism around the world.
Bargaining Outcomes
While the TWU, in this instance, may have been out-of-step with a large part of its membership base, Unions continue to play a key role in wage and enterprise agreement negotiations.
Bargaining negotiations should not be taken lightly by an Employer - it is extremely important to understand the complexities of Industrial Relations, set a strong and measured strategy on desired outcomes for the business, and plan contingency plans prior to commencing bargaining.
Your lead negotiator needs to be skilled at both managing the parties involved directly in the negotiations, as well as stakeholders that are indirectly involved whom influence outcomes (for example, the Executive team, the Board and external interested parties like the State Government).
Enterprise Bargaining – Productivity & Innovation
Without significant experience in IR, some bargaining strategies miss the whole intention of why a company may benefit from an Enterprise Agreement, above just operating under an Award.
For a business, an Enterprise Agreement can create a level of flexibility not seen with Awards and allow a company to create inroads on critical aspects of their business, which are unique to them.
Awards are clunky and written “for the masses” – enterprise agreements are written for the business and are a real opportunity to capture that uniqueness with clauses that create flexibility, productivity and innovation.
Enterprise Agreements can also allow you to bring a number of Awards together under one roof, create your own classification structures and simplify your employment framework.
Without a strong background and understanding of IR, some businesses fail in this vision and just end up paying higher wages, still within the operating constraints of a clunky Award, with little to no productivity gains.
What to
do now?
If you find an Award, or multiple Awards are restricting your business, please contact us. An Enterprise Agreement may not be the answer, but there are other avenues out there to allow us to assist you in creating flexibility for your business to bred success.
If you have been approached by a group of employees or a Union to negotiate an Enterprise Bargaining Agreement, we can assist you in developing a sound IR strategy that complements your business and your required business outcomes.
Contact Mel today via phone, email or use our Contact Form
if you’d like some more info, or need some help.